A turning point for the trade balance

According to the National Statistics Office's report on the socioeconomic situation in October and the first 10 months of 2026, Vietnam's total merchandise trade was preliminarily estimated at $122.03 billion in October, up 3.7% from the previous month and 47.4% year-on-year.

Exports reached $64.67 billion, up 8.7% month-on-month and 51.4% year-on-year, while imports stood at $57.36 billion, down 1.4% from September but still up 43.1% from a year earlier.

The gap between exports and imports resulted in a merchandise trade surplus of $7.31 billion in October, significantly higher than the $1.3 billion recorded in September. This marked Vietnam's second consecutive month of trade surplus, indicating an improvement in the trade balance after several months of deficit.

In the first 10 months, total merchandise trade reached $1,010.55 billion, up 32.3% year-on-year. This was the first time Vietnam's trade turnover had exceeded the $1 trillion mark.

Exports totalled $499.24 billion, up 27.5%, while imports reached $511.31 billion, up 37.4%. As imports grew faster than exports, Vietnam still recorded a merchandise trade deficit of $12.07 billion, compared with a surplus of $19.49 billion in the same period last year.

The surpluses in September and, particularly, the sharp increase in October have therefore helped narrow the cumulative trade deficit considerably. However, this cannot yet be taken as evidence of a sustained reversal in the trade deficit trend, as import growth in the first 10 months remained nearly 10 percentage points higher than export growth.

Trade turnover exceeding $1 trillion reflects a strong expansion in international trade, but also highlights continued high demand for imports serving production, business activities and investment. As a result, the trade balance in the final two months of the year will depend not only on whether export momentum can be sustained but also on the composition and pace of import growth.

A test for the final two months of the year

At the Ministry of Industry and Trade's regular press briefing for the third quarter of 2026, Trinh Thu Hien, deputy director of the Import-Export Department, said the year-end peak export season provided grounds to expect the trade deficit in the final months and for the whole of 2026 to fall below $10 billion.

The forecast was made when the trade deficit in the first nine months remained close to $20 billion. The subsequent surpluses in two consecutive months, particularly October's $7.31 billion surplus, have strengthened the basis for that expectation.

However, for the full-year trade deficit to fall below $10 billion, Vietnam would need to record a net trade surplus of more than $2.07 billion in the final two months, based on the cumulative deficit of $12.07 billion after 10 months.

One favorable factor is the continued strong growth in exports. In October alone, export turnover rose 51.4% year-on-year, while the 10-month figure increased 27.5%. If orders and deliveries remain strong during the year-end peak season, exports will continue to play an important role in narrowing the trade deficit.

On the other hand, import pressures warrant continued monitoring. Import turnover rose 37.4% in the first 10 months, considerably faster than export growth. Although imports fell 1.4% month-on-month in October, they were still up 43.1% year-on-year. This indicates that pressure on the trade balance has not yet fully eased.

However, the trade deficit should not be assessed solely in terms of the size of the surplus or deficit, Nguyen Tuan Viet, CEO of Vietgo, a trade consulting company, told The Investor. He said a trade deficit over a given period could reflect the accumulation of domestic capacity if imports were used for investment, production-line upgrades and technological development.

According to Viet, it is important to distinguish between imports serving production, investment and technology upgrades and those that fail to generate commensurate added value.

"If we want to move fast, we need to import technology and gain access to and apply the world's most advanced technologies," he said.

When translated into new production capabilities, imported resources can lay the foundation for improving product quality and the competitiveness of domestic businesses.

This perspective suggests that improving the trade balance is not simply a matter of reducing imports to achieve a surplus. More important is improving the efficiency of imports, developing domestic production capacity and enabling Vietnamese businesses to participate more deeply in supply chains. These are also prerequisites for export growth to generate greater added value for the economy.

October's sharp increase in the trade surplus has brought Vietnam closer to its goal of keeping the full-year trade deficit below $10 billion, but the final two months will remain a crucial test. Alongside sustaining export momentum, the challenge will be to ensure that imports serving production and technological innovation translate into genuine competitiveness rather than simply expanding trade turnover.